Mumbai: NCLT Extends Deadline For Hinduja Group's IndusInd To Complete Reliance Capital Acquisition

Mumbai: The Mumbai bench of the National Company Law Tribunal (NCLT) on Tuesday extended the date given to the Hinduja group owned IndusInd International Holding Limited (IIHL), in order to complete the formalities to implement the resolution plan for the bankrupt Reliance Capital. The tribunal has given the company an extension until August 10, for the same.

The order passed by the NCLT on May 26 approved IIHL’s application for an extension of the May 27 deadline for paying ₹8000 crores to acquire Reliance Capital. The group has cited pending regulatory approvals and compliance requirements as reasons for its extension.

The extension of the date was, however, opposed by the administrator as well as financial lenders. As per the application, the resolution plan specifically contemplated approval from the Government of India in relation to foreign equity investment. “It can not be said there was any doubt as to the specific approval required for bringing in a foreign equity component, and the applicant’s (IIHL) plea in this regard has no substance. It was further submitted by them that even the binding term sheet in relation to the debt component has not been placed on record. It was submitted by the Financial Lenders, that nonetheless, even if this Tribunal is to allow further extension to comply with its clause in relation to the payment of resolution money, the Financial Lenders ought to be compensated for the loss caused to them by deferring the payment of resolution money by an extended period.”

The tribunal, after hearing the arguments advanced in the case, has thus directed IIHL to deposit Rs. 250 crores towards domestic equity in the escrow account in India designated by the Committee of Creditors. IIHL is also asked to deposit Rs. 2500 crores in an offshore escrow account designated by the Committee of Creditors as a contribution towards the equity to be invested in the corporate debtor, and this amount shall forthwith be brought into India upon receipt of approval from the Central Government for bringing in foreign equity.

The tribunal has also asked IIHL to submit to the Monitoring Committee copies of the binding executed term sheets for the loan amount of Rs. 7300 crore, and such loan shall be disbursed to the credit of the designated account before the extended date, subject to foreign equity component approval in place on or before July 31.

On June 29, 2023, the lenders of Reliance Capital accepted the revised ₹9661 crore bid put forth by IIHL. The company had made the highest cash offer of ₹9661 crores in the auctions and secured as much as 99% of the lenders votes.